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Hospitals sue Highmark over Medicare Advantage

By Pittsburgh Business Times  
   September 25, 2014

A group of hospitals in western Pennsylvania have sued health insurer Highmark Inc. over its reimbursement for patients who have Medicare Advantage coverage. The lawsuit was filed Monday in the Allegheny County Court of Common Pleas, and it alleges Highmark and subsidiary Keystone Health Plan West Inc. began improperly shorting the hospitals 2 percent of Medicare Advantage reimbursement at the beginning of the year. Highmark notified the hospitals in October 2013 it would cut payments by 2 percent as part of an across-the-board federal budget reduction plan called sequestration. Sequestration was mandated by the federal Budget Control Act of 2011, which cut all government spending by 2 percent. In March of last year, CMS began cutting payments to Medicare Advantage carriers by 2 percent.

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